World Bank approves new financing package for Ukraine worth over $2 billion

The World Bank’s Board of Executive Directors has approved a new financing package for Ukraine worth over $2 billion. For the first time, part of the funds will be allocated from proceeds from frozen Russian assets, an important step to support Ukraine’s financial stability and economic growth in the context of war.

The program approved by the World Bank includes two main components. The first is a financing of $1.05 billion, which will be provided through the International Bank for Reconstruction and Development (IBRD), with enhancements through the Advancing Needed Credit Enhancement (ADVANCE) Ukraine Trust Fund. The package is complemented by loan guarantees from the governments of Japan and the United Kingdom.

The second component is a grant of $1 billion, which will be allocated from frozen Russian assets through the F.O.R.T.I.S. Ukraine FIF, which is administered by the World Bank. These funds will be used to support Ukraine’s financial system and strengthen its economic stability in the face of a constant external threat.

The World Bank emphasized that this financial package aims to strengthen Ukraine’s economic policy, create a foundation for sustainable growth, and ensure macro-financial stability. These steps are part of the global strategy of international financial organizations to support Ukraine in its post-war recovery.

It is worth noting that this step is a continuation of cooperation between the World Bank and Ukraine. In October 2023, the bank’s executive board approved the creation of a special Financial Intermediation Fund (FIF), to which contributions are expected from the United States, Canada, and Japan.

Also, in December 2023, the U.S. Treasury Department announced the allocation of $20 billion in credit to Ukraine under the G7 initiative, which provides for a total amount of $50 billion in assistance from proceeds from frozen Russian assets. This will allow Ukraine to improve its financial situation and strengthen its economy in the face of war.

This financial package from the World Bank is an important step in international support for Ukraine, which will not only maintain macro-financial stability, but also support the recovery of key sectors of the economy in extremely difficult conditions.